Lutz appeared on CNBC’s Squawk Box, and this time, had choice words for not just the company, but die-hard followers, too.

“Tesla supporters are like members of a religious cult,” the former GM exec told CNBC’s Squawk Box. “Just like Steve Jobs was worshiped at Apple, it’s the same way with Elon Musk, who is seen as a new visionary god who promises this phantasmagorical future, a utopia of profitability and volume.”

Lutz calls out Tesla’s rampant cash burn of $250 million per financial quarter and stated the problem cannot be fixed with greater volume.

“Every time [Tesla] gets a $500 million injection from a new stock sale or a $750 million injection of new money, it lasts them two or three quarters. This is a problem that volume can’t fix.”

“If you’re in a variable loss – that is, you’re not recovering labor and materials in your sale price – then doing twice as many, or three times as many, or four times as many [sales] doesn’t help. The losses just get bigger and bigger.”

Tesla recently announced its latest U.S. numbers, showing positive increases, while Tesla stock jumped slightly following the news. We won’t really know the future of Tesla until the company’s promised Model 3 arrives in limited quantities, likely starting in 2018.

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32 Comments

Next how much more ill it cost over the $35K as promised by Musk and then later who admitted the price will be higher.

The cars on resold are more than the entire production of all the cars they ever built. How long will people wait with new EV products coming?

Lutz has a valid point as volume is not going to fix their issues. Their recent quality issues on the S and X are creating some negative image as well increased costs.

The plan of one model paying for the next was a good idea till the X failed to carry the load for the 3 model. Now the delay of the 3 is killing the time table and development of the next model. All the while the X warranty issues are eating cash as well as the need to re do the S model at some point as it is getting a bit old now. Just removing a fake grill was no help and new software only goes so far.

Tesla does have a loyal following that are often blind tot he truth.

Tesla the auto company is aptly names as Nicola himself was a bit of a of a smart odd ball that failed miserably at business. Many failed to remember he died a nearly forgotten man in a NYC hotel room alone. His name sake company may be following the same path.

Lutz probably read the previous GM Authority news that Apple co-founder and prime engineer Steve Wozniak will ditch his Tesla Motors Model S for a Chevy Bolt EV, and that gave him the inspiration to criticize Telsa Motors.

Every time someone buys a Tesla, you and I the taxpayer subsidize that purchase heavily. By the way the Tesla isn’t a bad looking auto from every angle but the front. The front looks like a yawning shark or a Koi going for a snack with that awful glass bubble put there as a place holder until the designers figure out what to do.

And i suppose the gas you use everyday is not subsidized?
And no lives were lost in wars for the protection of those oil producing countries?
But i agree, we should get rid of subsidies, ALL OF THEM!
How much do you think you’ll pay for a gallon of gas then?
After owning a Volt for 5 years now, i’ve cut my gas usage by 90% and my next car WILL be full electric cause the technology is so superior to a gas car it’s not funny.
Last question, Please explain to me why, in 2016, it makes sense to be still using explosions to propel your car?

some of us like the sound of a V8 as our motor and a loud exhaust? I have driven electric cars and while they have a lot of a torque and fun to drive at first they feel like gocarts. It makes $$$ sence to get one i guess if you drive a lot of miles but for someone like me who only drive around 1000KM (600Miles) per month I would rather drive my Camaro 6.2L V8 with NPP exhaust. Cant beat the thrill of a roaring V8 engine under the hood.

Driverguy01:
Your life has been subsidized by my 37 years in the Navy, a Purple Heart and various other awards.
In our government, subsidies and lobbies will never go away. I applaud your pleasure with your Volt but so many prefer other options. But remember for now and the foreseeable future charging stations require fossil fuel.

Sir, with all due respect, We have all worked in a system to make our world work for us with complete disregard to our mother earth, as slaves to big oil.
No conspiracy here. The time has come to make things better for our kids and grandchildrens.
We are about the same age sir, and i feel that with our buying power, believing in climate change, should we continue using fossil fuel or move away from it?
Science says we have to stop this stupid experiment that has lasted for way to long. Technology in batterys now has matured enough to gives us the solution for transport propulsion, all transport.
Owning a Volt has changed me and those around me, beyond what i was prepared for. I never saw that coming, at all!
Your first post got to me when you mentioned the subsidies and i needed to point out that we the people subsidize big oil way more than ten fold what EVs get. That’s a fact.
I feel it’s our duty to pay a little more for an EV, sinse, at our age, usually, we can afford it without breaking the bank.
You served your country (and big oil) for 37 years and i applaude you for that and i thank you, but the time has come to go electric and stop polluting our planet. If that means more subsidies i’m all for it.
95% of the people who made the switch to electric, swear they’ll never go back.
That says something.
Refuelling at home, while i sleep, is ultimate convenience and cheap as dirt here in Quebec.
I wish people would try an EV for a full week to get how superior that technology is.
Comparing ICE cars to EVs is like comparing today’s LCD tvs to 1970 black and white tube tvs. Would anybody go back to tube tvs?
And for those who argue they love the sound of a big V8, clip some baseball cards on your rims like you did on your bikes when you were young, lol
Wish you the best, sir.

I love Bob. He is right more than he is wrong but he believes what he says,

Tesla is flooding the news with that they made money last quarter. This is the second quarter they made money in the history of the company.

The minions will praise and not discuss the details of the profit for the quarter and in time the will return back to no profit quarters again.

I am waiting for the finical people to pick the claimed profits details apart.

I personally do not like Musk but with that said I have not cheered for the demise of Tesla as it would set back all EV models that are coming. They have spurred interest in this kind of vehicle and helped the other automakers come up with acceptable product that no one would have paid attention too.

But on the other hand they are a very fragile company that has lived on government funding and kick backs with a very difficult future ahead. Not only the challenge of new product they will need to invest in with money they do not having much if anything coming in. The other issue is they will no longer be the only and best game in town anymore.

Just as Edison surpassed Tesla in history so will other models and brands I the automotive market as they have better business plans and much deeper pockets and resources.

1. Delayed paying suppliers (increase in payables of over $400M this quarter),

2. zero emissions credits of $139M (triple what they had last year and $0 in Q2), and

3. Massive reduction in R&D spend ($500M less than prior quarter and analyst expecations). That’s over $1.1B in actions (mostly 1-time) that resulted in a the $0.176B profit for the quarter.

It is details like this that can make a profit show but the devil is in the details. I would recommend digging deeper in how the money was spent or not spent before the Kool Aide toast by the Cult members is given.

Tesla supporters believe in the LIE that they’re green and trying to protect the world; but in actuality, all electric vehicles are no cleaner than a gas powered car because they still need to be recharged by electricity coming from FOSSIL FUEL power plants because the Obama Admin ‘FAILED’ to follow China’s approach which is to replace coal burning fossil fuel power plants with nuclear power plants as the Sierra Club even tried to encourage Obama to accept nuclear.. as in a matter of a couple of decades, China will most likely generate ‘LESS’ greenhouse gas than the United States because while we’re stuck using fossil fuel they’ve moved on to Nuclear.

Wrong.
Don’t let the perfect be the enemy of the good.
Only 30% of the electricity comes from coal in the US.
Coal plants are 50% efficient, gas cars are, at best 20% efficient, so even if your electric car is powered by coal electricity, it’s still way better than a gas car.
I agree that Thorium nuclear plants make sense, but only Thorium, not regular nuclear plants that we use today.
But solar is even better as it has become very cheap in the last two years and continues to get cheaper.
You can continue complaining or take action on things YOU can do, now.
I can understand your hesitation to embrace the electric car if you think electricity from coal is worst than just using gas to propel your car but that is not the case.
Please don’t just take my word (i know you wont!) and do some research on the efficiency of coal powered plants by yourself, then you will find the truth.
Get the facts instead of repeating false arguments given by big oil.

As a nuclear plant worker, I am a little biased but some of your facts aren’t completely correct either.
Most coal plants have a steam cycle that is similar to a nuclear plant and therefore are not much more than 33% efficient (total heat produced vs. electricity produced). That is simply based on the laws of thermodynamics. With nuclear it isn’t so bad because we are producing ashes and CO2 and NOX. Modern combined cycle gas plants are approaching 60% efficiency due to how they produce power. Therefore, any coal plant replaced with a combined cycle gas plant reduces CO2 emissions and reduces the other emissions from a coal plant. Very little electric production in the US is made using oil. Most of that stopped after the oil embargoes in the ’70s.
Nuclear plants are great for base load. They provide power 24/7 and existing plants are running very well compared to the 1980’s. They are relatively cheap and provide a lot of good paying jobs. I would think all the left leaning solar lovers would love a good jobs program. (That was a bit of a joke. Don’t hate me)
Solar is great and should be embraced for helping with peak loading but I still think that it is a long time before it becomes greater than 25% of electric production. Remember, some of the major loads in the US (north east) are far from the major solar production sites (south west).
Wind has been a big producer in this country and has made it difficult for some nuclear plants to exist (midwest). It is another important part of the future of power production in the US. Wind has been greatly subsidized by government tax breaks though.

Another bit of disclosure: I drive an 2015 Volt and really like it. It is fun to see how much over the estimated 38 mile range I can get in a day.

Kurt – 2016 US energy production reports show that 67% of US energy is produced by fossil fuels, with another 20% from nuclear and 6% from hydro. Wind is 4.7% and solar is .7%. You are correct on oil. It is 1%. By the way, I think the Volt is a great little car because you can be electric locally and still drive cross country with the standard gas engine. And I believe the 2016 Volt has over 50 miles of electric range. All said, I also enjoy driving my Corvette Grand Sport.

Though coal is used less and less, most power plants use natural gas or oil for power. I know of no solar or wind powered plants that produce energy in any quantity for mass use. Therefore electric vehicles indirectly use gas and oil in most applications.

You sir are very correct here as wind and solar at best is supplemental on a large scale.

Even Germany has moved back from both as they have struggled to fill their needs with either.

Also with electric cars they still can not charge as fast as a fill of gasoline yet nor are there any really solid infrastructure to charge them nation wide yet. Electric cars are still in the early stages and have more work to do before they are ready for prime time.

The electric car is about where the Gas cars were in 1910. Getting there but not fitting for everyone needs or budget yet.

The reality i s ICE will be around for a good while longer barring any real major breakthroughs.

Also Coal will only phase out due to regulations by those who will not be around when the repercussions of it being gone will be felt. Just as the health care the cost for energy will climb as record rates due to lower supplies and higher cost with an ever raising demand.

Keep in mind the people killing coal are the same people who said we can keep our doctors and that we will save money on health care.

If Tesla followers are a cult following, that would make GM the Catholic Church. Slow, unchanging and corrupt. Just because something is new doesn’t mean it’s dangerous. This is classic fear mongering under the guise of financials. GM took many losses over the years but still expects consumers and government support and patience. Only time will tell, and the automotive market has been needing a new player after all of the mergers, buy outs and dissolution of manufacturers.

If someone prefers to drive an EV, and all the inconveniences that that could entail, by all means they have a right to do so. Just don’t pretend that you are saving the world by doing so. Previous comments have shown that not to be the case. Conversely, if I prefer a V6 or V8, that is my right. No guilt trips, please!

A comment from somebody that never even sat in any EV, let alone tried one.
I never said i was saving the world but one thing is sure in my mind, my wallet says thanks. Go to the dealer and try the Volt, you will be amazed and that might just trigger something.
After 5 years, i can assure you, you are not the first uninformed neysayer i encounter. I get comments like yours daily. What i’m working for is to make sure the transition happens as fast as possible and counter false uninformed claims.
Comments like yours are generic. I’ve heard them too many times to my taste.
But we just passed the 1% mark of new car sales in the US and it looks like we are going to double EV sales yearly from now on, and maybe even faster than that.
Now, you have the choice to continue believing you are right and EVs are full of inconveniences without ever having tried or lived with one for a week, or you can be curious enough to give it a chance and live with a far superior machine that you’ll slap your forehead and say, what the hell was i thinking! That’s a garantee!
I do wish you the best, sir.

I don’t consider myself uninformed about EV vehicles. I have subscribed to Motor Trend, Car & Driver, Road & Track and AutoWeek for many years and read all of the articles. I have also spoken with EV owners. I think the Volt is amazing in what it can do. But I can buy a top of the line Equinox V6 for a lot less than a loaded Volt. I can load it up for a trip with far more stuff than would ever fit in a Volt and drive over 500 miles on a tank of gas. I can then refuel in 10 minutes and drive another 500 miles. As an alternative, I could buy a loaded V6 Camaro for far less than a Volt and it will outperform the Volt in straight line performance or on the back roads and still get 30mpg highway. A Volt would likely make a fine 2nd or 3rd car, but I don’t see it as primary transportation for me. When an EV can be recharged in 10 minutes, travel for several hundred miles on a charge at a similar (non-subsidized) cost as my Equinox, maybe I will give it a try.

Rich, i’m sorry to say you just don’t get it. You are comparing a Volt with an equinox or a Camaro, really? How about comparing it to a prius, a civic, or even a cruze? You know, like apples to apples.
Far the sake of it, i can refuel my Volt in ten minutes also and go from any point A to B as fast as any other car. You don’t have to plug it in, it can run on gas for 100% of the time but what woluld be the point?
Your argument of recharging a EV in 10 minutes is a huge proof that you don’t know enough about EVs cause that’s an argument you only hear from the uninformed, period.
in the morning, a Volt has enough energy to travel more than 90% of the people’s needs.
You have to get this part, most people travel less than 40 miles per day, way under the Volt’s range on electric but if ever you need to go further, the gas generator is there exactly for those moments. How much better can it be?
And that my friend, would result, like in my case, in a 90% cut in gas usage for the vast majority of EREV owners.
I, for one would love to see a EREV Camaro or equinox, but GM likes making money on parts for those cars cause you know, investors. If Mercedez, BMW, VW and a few more all decided to electrify ALL of their fleet, that should raise your eyebrows also.
Enjoy that subsidized gas on all of us, Rich cause we all pay an insane amount of money just so you pay very little at the pump.